Part 4 (1/2)

[Footnote 77: Report of W.S. Carter, Grand Secretary-Treasurer, June 30,1904.]

[Footnote 78: Locomotive Engineers' Journal, Vol. 38, p. 966.]

[Footnote 79: Postal Record, Vol. 19, p. 10.]

The advantage of insurance as a means of securing ident.i.ty of interest within the organization was not fully recognized in the early development of the insurance systems, consequently entrance into the insurance departments of these organizations was originally optional.

The Brotherhood of Locomotive Firemen first adopted compulsory insurance at the fourth annual convention, 1878.[80] The Brotherhood of Railway Trainmen next adopted a similar feature in 1888. Although the Engineers and the Conductors did not enforce compulsory insurance until 1890 and 1891, respectively, during the twenty years preceding its adoption frequent proposals were made by subordinate divisions of both these organizations for the adoption of such an arrangement. On different occasions the national conventions considered the wisdom of such proposals, weighing in turn the advisability of such a measure and the ability of the organization to enforce it. The thorough discussion of the subject among the Engineers and the Conductors undoubtedly prepared the younger organizations for the settlement of this question at an earlier stage in their development. The Trainmen adopted compulsory insurance in 1888, while the two older organizations were in the midst of the struggle.

[Footnote 80: Locomotive Firemen's Magazine, Vol. 21, p. 181.]

The Switchmen adopted it in 1892, and, after reorganization, again on October 1, 1901, and the Telegraphers on January 1, 1898. The Letter Carriers alone retain the system of optional insurance.

Only in the Switchmen's Union and in the Brotherhood of Maintenance-of-Way Employees has the operation of the compulsory system met with interruption. The compulsory rule of the Maintenance-of-Way Employees during the early nineties was frequently repealed and readopted. The opposition to it was due in a large measure to uncertainty as to the number of yearly a.s.sessments necessary and also to the fact that many of the members carried insurance in old-line companies.[81] The Switchmen's insurance department suffered a suspension from 1894 to 1897, and although the Union had compulsory insurance before its suspension, on reorganization a voluntary system was adopted, and not until October 1, 1901, did the Union succeed in reestablis.h.i.+ng a compulsory system.

[Footnote 81: Advance Advocate, Vol. 5, p. 485.]

In all the organizations there is a cla.s.s of members, called non-beneficiary, who are not eligible to the insurance departments because of partial disability or because of having pa.s.sed the age limit.

The Brotherhood of Locomotive Firemen provides that the non-beneficiary member shall be ent.i.tled to all the privileges of the subordinate lodge, but shall not take part in the national convention or in any way partic.i.p.ate in the benefits and privileges of the beneficiary department.[82] Similar rules are found in the other brotherhoods. The Trainmen and the Switchmen issue to non-beneficiary members insurance certificates only against death in the sums of $500 and $600, respectively.

[Footnote 82: Const.i.tution, amended 1902 (Peoria, n.d.), sec. 163.]

The efficiency of compulsory insurance rules in securing and retaining members in the brotherhoods is generally acknowledged among the railway employees. After the member has carried insurance for several years, his financial interests are bound up with the interests of the organization, and his loyalty to the union is increased. From this loyalty flows greater interest in every phase of the brotherhood's work. The operation of compulsory insurance appears to have caused an increase in the members.h.i.+p of the brotherhoods. On January 1, 1890, the date on which compulsory insurance became operative, the members.h.i.+p of the Brotherhood of Locomotive Engineers numbered 7408; on January 1, 1897, it had increased to 18,739; and in May, 1904, to 46,400.[83] On January 1, 1891, the date on which compulsory insurance was inaugurated, the members.h.i.+p of the Order of Railway Conductors numbered 3933; on January 1, 1898, it had increased to 15,807, and again on January 1, 1904, to 31,288. It is noteworthy that during the depression, 1893-1897, those organizations having systems of voluntary insurance suffered far more severely than those enforcing compulsory insurance. Thus, the Telegraphers were almost annihilated, while the Firemen and the Conductors practically maintained their position.

[Footnote 83: Locomotive Engineers' Journal, Vol. 37, p. 446; Vol. 18, p. 654.]

The cost of insurance per $1000 varies greatly in the different organizations, as may be seen by the following table:[84]

Cost of Insurance per Organizations. Fiscal Year Ending. $1000 a Year.

Engineers ........... December 31, 1903 $17.80 Conductors .......... December 31, 1903 16.00 Firemen ............. June 30, 1904 12.00 Trainmen ............ December 31, 1903 18.00 Telegraphers ........ December 31, 1903 7.20 Switchmen ........... December 31, 1903 20.00 Maintenance-of-Way 12.00 Employees ......... December 31, 1903 15.00 | according 18.00/ to age Letter Carriers...... December 31, 1906 9.24 according 21.96/ to age

[Footnote 84: These amounts have been furnished by the grand secretary-treasurers of the several organizations, except those of the Telegraphers and the Maintenance-of-Way Employees, which have been taken from the 1903 const.i.tutions and represent the amount of the regular monthly a.s.sessment.]

The differences in the cost of insurance are the result of several factors. The slight degree of risk in the occupation is largely responsible for the relative cheapness of the Telegraphers' and the Letter Carriers' insurance. More important differences are due to the age grouping of the members.h.i.+p. Thus the Firemen, whom old-line companies, for the most part, cla.s.sify as extra-hazardous, furnish insurance against death and disability at $12 per $1000. The princ.i.p.al reason for this low rate is the rapid change in members.h.i.+p, the old men withdrawing and being replaced by young men. Near the close of the nineties the cry of ”Something must be done to keep the old members in the Brotherhood of Locomotive Firemen” was raised; but it was clearly shown that ”the greatest favor a member of the Brotherhood could show the insurance department was to pay his a.s.sessment for ten years and then withdraw, permitting a man ten years his junior to take his place.”

The grand secretary-treasurer states that the members.h.i.+p practically changes every seven years, due to promotions to the position of engineer and to withdrawals of older men for various reasons. The withdrawal of old men conduces to a more favorable age grouping, to a decrease in the death rate, and to a consequent decrease in the cost of insurance. The Switchmen's Union presents an interesting contrast. The Union prescribes no age limit, and higher positions in the service are not so frequently open to the advancement of its members. The result is that the number of older members is relatively greater, and insurance is maintained at a considerably higher cost.

The cheapness of the insurance offered by these organizations is better appreciated when compared with that offered by old-line companies. The following table shows the cost of insurance per $1000 in a typical life insurance company for different cla.s.ses of railway employees and letter carriers at thirty-five years of age:

Cla.s.s of Employees. Rate per $1000.[85]

Engineers .................................... $27.23 Conductors ................................... 22.23 Firemen ...................................... 27.23 Trainmen ..................................... 27.23 Telegraphers ................................. 22.23 Switchmen .................................... 27.23 Maintenance-of-Way Employees ................. 27.23 Letter Carriers .............................. 27.30

[Footnote 85: The letter carriers' rate is that of the New England Mutual Life Insurance Company, the rates of the other cla.s.ses of employees are those of the Aetna Life Insurance Company.]

a.s.suming that the average age at admission of the members of unions is thirty-five, the cost of insurance in the regular companies is far higher than the cost for an equal amount in the unions. The conductors pay their union twenty-five per cent. less than they would have to pay to an insurance company and the locomotive firemen pay considerably less than one half of company rates. These rates, moreover, are for insurance against death only, while the insurance offered by the brotherhoods also provides against total disability.

The compulsory insurance has not been in operation long enough in any of the organizations for its full effect to be seen. It is certain that as the unions grow older they must materially raise the rates at which they issue insurance. The rapid growth in members.h.i.+p has brought into all the unions in this cla.s.s in recent years a proportionately large number of young men. The limitation on the age of the insured has contributed to this result. As these members grow older, the death rate will increase.

As has been noted above, however, it has not been primarily the cheapness of the insurance but the combination of death and disability insurance which has been the advantage possessed by the union systems.